Does technical assistance alleviate energy poverty in sub-Saharan African countries? A new perspective on spatial spillover effects of technical assistance (original) (raw)
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Energy development and sub-Saharan African economies in a global perspective
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SUB-SAHARAN African countries have been among the most severely affected by two of the mega-trends in the global economy over the past two decades. The first is the dramatic transition from a low-priced to a high-priced regime in global energy markets in the 1970s, a development that marked the end of the post-1945 development, when rapid economic growth. higher social welfare and a substantial improvement in living standards were assumed to be predicated on cheap and rapidly rising demand for energy, particularly oi1.l The emergence of the era of high-priced energy in the post-1973 period signalled the beginning of a significantly more difficult environment for rapid and sustained socioeconomic development in sub-Saharan Africa, where most of the countries are not only low-income economies, but also net oil importers. The second mega-trend of relevance to African energy problems is the global economic and financial maladjustments and crises of the post-1973 era, and the subsequent widespread adoption of stabilization and structural adjustment policies to correct these problems. The disequilibrium in the international financial system, the oil price increases of 1973-74 and 1979-80 and the slowdown of world economic growth were translated in sub-Saharan Africa into nearly two decades of poor economic performance, food crises, fiscal and external sector disequilibria, high external indebtedness and sharp reductions in living standards.2 Sub-Saharan Africa's response to the latter global mega-trend was the widespread adoption of Structural Adjustment Programmes (SAPS) under the aegis of the International Monetary Fund (IMF) and the World Bank. The adoption of more market-oriented exchange rate and domestic pricing policies was the aspect of S A P most relevant to Africa's energy policy and development.3 The sharp devaluations of the currencies of African countries adopting the economic reform programmes of the IMF and World Bank type, coupled with higher global energy prices, aggravated the pressures on the already precarious balance of payments positions of most of these countries, through higher oil import expenditure.
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Sustainable energy transition in developing countries: the role of energy aid donors
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Dialogues on global climate policy are increasingly discussing the sustainable energy transition, with Goal 7 of the UN's Sustainable Development Goals highlighting the importance of affordable and clean energy. This study looks at foreign aid as a carrier of global climate policy and examines donor behaviour in the energy sector. By examining donor behaviour when giving energy aid, one can grasp how the donor community helps recipients achieve a sustainable energy transition. A panel of donor-recipient pairs, covering 29 donors and 99 recipients, was constructed for the period between 1996 and 2013, using data from Organisation for Economic Cooperation and Development Creditor Reporting System (OECD CRS), International Energy Agency (IEA) and World Development Indicators (WDI). The pair-year panel data were empirically analysed using a two-part model to test whether energy aid donors respond to recipients' needs with regard to renewable energy and residential electricity. The findings demonstrate that donors respond to recipients' sustainable energy needs, both renewable and residential, when selecting recipients. Moreover, donors tend to increase the amount of aid based on renewable energy needs. The findings also highlight the significant role of international climate policy, as donors have changed their energy aid-giving patterns since the start of the Kyoto Protocol. Contrary to the common belief in the aid-giving literature, this study shows that, with regard to energy aid, donor interests are more weakly related to recipient selection than are recipient needs. Key policy insights. Donors are influenced by the residential energy needs of recipients when giving energy aid, which aligns with the Sustainable Development Goals.. Donors' energy aid-giving patterns changed between the periods before and after entry into force of the Kyoto Protocol, highlighting the significant role of international climate change policy.. Policy makers and aid practitioners can steer donors to continue to allocate resources to the development of recipients' energy policy and to help recipients prepare institutional structures to attract private investment in sustainable energy.
ENERGY POVERTY AND ECONOMIC DEVELOPMENT IN NIGERIA: EMPIRICAL ANALYSIS
KIU Interdisciplinary Journal of Humanities and Social Sciences, 2020
In consideration of Nigeria's low access to electricity which has consistently been below 60% for nearly three decades, the study examines the development effect of energy poverty in the country. The S-estimation method of the robust least squares estimator was employed for analysis of annual time series data spanning the period from 1990 to 2017. The study finds that energy poverty adversely affects the nation's economic development, implying that improved access to electricity is development-enhancing. Domestic investment and labour force are also found to be crucial development factors in the country. However, FDI inflows, trade openness and currency depreciation are found to have adversely affected the development of the nation's economy, highlighting the (low) extent of preparedness of the country for the vagaries of globalization. In view of the empirical evidence, to enhance the development of the nation's economy (and the standard of living therein), the study recommends expansion of rural and urban electrification; reduction of electricity tariffs; design and implementations of policies and programmes to encourage domestic investment; labour force development; import controls and export promotion; prevention of excessive depreciation of the domestic currency; and implementation of appropriate FDI policies to mitigate its adverse effects on development.